by: kent copeland eric hamilton chase luft adam stone
TRANSCRIPT
GLOBAL CAPITALISM MEETS
NATIONAL SPIRIT
By:Kent CopelandEric HamiltonChase Luft Adam Stone
Part 1: Article Focus
Article Focus
Corporate managers use of discursive resources
Focused now on discursive strategies of actors involved in mergers & acquisitions
Usually focused on financial and economic aspects
Nordea
Major Nordic Bank Group Built through Mergers & Acquisitions
Includes Swedish, Finnish, Danish, & Norwegian financial services company
Forerunner for Mergers & Acquisition Acquisition of Christiania Bank og Kreditkasse
(CBK) Prolonged process Norwegian State held majors shares
Overview of Research on Mergers & Acquisitions
Strategic Perspective Focused on decision-making processes Used to attempt understanding management
Cultural Perspective Cultural differences & contradictions,
organizational justice, organizational politics, ambiguity, and gender
Societal Perspective Considered social movements or fashions Winners/Losers, Success/Failure of Mergers &
Acquisitions
Discursive Strategizing
Activating, Performing, & Connecting
Who are the Actors?What is important for them?
3 sources of legitimacy Rationalistic Discourse Nationalistic Discourse
Method and Data
Prolonged Acquisition of CBK by Nordea Initial offer in 1999 Mergers, then final acquisition in
October 2000. Final name change in early 2001
Intertextuality 3 Stages of Analysis
Part 2: Mergers and Acquisitions
Mergers and Acquisitions
Merita (Finland) and Nordbanken (Sweden)- Oct. 1997 formed MNB
MNB acquires Unidanmark (Denmark) in March 2000
MNB and U acquire Christiania Bank og Kreditkasse (CBK Norway) in Oct. 2000
New group called Nordea
Prolonged Cross-Border Acquisition
CBK is second largest bank in Norway CBK is State controlled (35%) Norway reluctant to give up control MNB initial offer of U.S. $2.7 billion in Sept.
1999 Labour Party took control of government
offices in March 2000 – initially rejected offers Four other banks showed interest in acquiring
CBK MNB’s 10th and final offer approved in Oct.
2000
Rationalistic Discourse
Three main arguments: Need for banks to grow and globalize Problems related to State ownership Synergies realized by the acquisition
Need for Banks to Grow and Globalize
Large banks provide services more cost-effectively and gain competitive advantage
Increases value of bank in market for shareholders
Nordic bank package is attractive target for future acquisition
Acquisitions are only avenue for expansion
Problems Related to State Ownership
Politicians in Norway can’t keep up with financial world
Norwegian government inefficient and slow
State ownership is old-fashioned and detrimental to development
Privatization is inevitable
Synergies Realized by the Acquisition
CBK could exploit the other bank’s competences and have better access to capital
MNB’s offer was referred to as a strategic fit
New Nordic bank group could draw interest from large continental European banks (particularly Dutch or German)
Nationalistic Discourse
Norwegian newspaper – “Norway is in danger of becoming a subsidiary district in Europe’s periphery”
Norway wants to maintain decision making power
Norwegian nationalism is strong – prevented telecommunications merger
Norwegians vs. Swedes
Norwegians viewed acquisition as a war with the Swedes
Norway as little brother being bullied by Big brother Sweden
Strong Norwegian patriotism
“Norwegian Attitude”
Indecisive, difficult, patriotic, and suspicious of foreigners
Post acquisition integration could be difficult
Prevent rational decision making Norway stayed out of the European
Union and Euro zone
PART 3: MAKING USE OF DISCURSIVE STRATEGIES AND
RESOURCES(Key Players)
Merita-Nordbanken (MNB)
Drew on and mobilized rationalistic discourse in justifying their series of offers for CBK
Objective was to secure rapid growth and market share in Norway and become the largest bank in the Nordic Countries
Attempted to appeal to Norwegian nationalist sentiments; welcomed the State of Norway as a shareholder
Emphasized both shareholders’ interests and Norwegian interests more generally
In favor of the acquisition
Christiania Bank og Kreditkasse (CBK)
Mobilized rationalistic discourse in the media in stressing the strategic fit between the banks, and the compatibility between the visions of the managements
Employees felt positive because MNB had no plans for layoffs
CEO Tom Ruud became entangled in nationalistic discourse in ways that were, at times, beyond his control
In favor of the acquisition
Den norshe Bank (DnB) DnB, the largest Norwegian bank, faced the
threat of increased competition in its domestic market
Supported a domestic restructure and offered to take over the struggling CBK
Top management drew from nationalistic and rationalistic discourses when looking after their intersts
Profited 200 million krone by selling its 9.98% share of CBK in the merger
Against the acquisition
Handelsbanken
Sought to prevent MNB, one of its toughest competitors, from becoming one of the largest banks in the Nordic region
Made offer to acquire CBK, but image of a distinctly Swedish bank was problematic in Norway
Once MNB’s offer was taken, CEO Arne Martensson drew n rationalistic discourse to argue the price had become too high (interesting note: Handelsbanken’s original offer was higher in numerical terms than MNB’s)
Against the acquisition
“Experts” (aka Financial Analysts)
The acquisition was about making money It was about pursuing an ideological
agenda whereby problems related to State ownership in financial institutions are solved
Argued that CBK needed to have more private owners in order to remain competitive
Nationalistic considerations are subordinated to rationalistic argumentation
In favor of the acquisition
Centre-right minority government
Consisted of the Christian Democrats, the Centre Party, and the Liberals and were in power in Norway until March 2000
Rejected MNB’s initial offer for CBK; wanted to secure Norwegian State ownership of financial institutions
Constantly drew on nationalistic discourse in the CBK case
Shifted their views of the acquisition after they lost power; wanted the State of Norway to only have a significant stake in the new bank
Ambiguous towards the acquisition
The Labour Party
The largest parliamentary party in Norway Used nationalistic discourse by hoping to
devise a national solution to the banking and financial sector
Decided to concentrate Norwegian State ownership in one financial institution, DnB, and agreed to sell CBK to the highest bidder
Rationalistic discourse was mobilized to justify the deal
Ambiguous to the acquisition
Part 4: Conclusion
International Industrial Restructuring
Focused on cross-border acquisitions Strategy development
Strategy Strategy = Language constructed to persuade others
to accept understandings and take certain actions
How do actors make use of discursive strategies/resources in public discussion in pursuing/resisting international acquisitions?
- Depends on position held
Financial/Economic rationale is insufficient- Combine rationalistic arguments with
nationalistic sentiments- Rationalize nationalistic arguments
Nationalism = Financial ends/obstructs others’
strategies
Rational Discourse (Media)
Cross-border acquisitions are taken-for-granted
Viewed as inevitable parts of global industrial restructuring
Gives voice to those arguing for cross-border acquisition
Caused by: corporate growth, competiveness, and efficiency
Usually reflects strategies, plans, analyses, or calculations when justifying viewpoints
Nationalistic Discourse (Media)
Can challenge rationale of international industrial restructuring
Is often emotional response Mobilized by those against cross-border
acquisition, and those with ambiguous viewpoints
Varies between countries involved… Built on relationship-specific social
identification Used to challenge or resist global capitalism
Discursive Strategies
Same actors can draw on different/contradictory discourses at different times
May draw on same discourses as opposition to solidify their position in a certain direction
Position can be taken out of context due to lack of control over publishing (hypocrisy)
Future Research Suggestions
Ability of actors to juggle with discursive resources over time
- Differing profiles of media outlets
The ways in which corporate executives handle variation of discourse between business press and the tabloids
- tabloids have negative/inverse effect
Dynamics involved in production of legitimacy in the media (things interpreted wrongly)
Intersection of business and politics remains under-researched